Getco, Knight Capital Agree To $1.4B Merger

Law360, New York (December 19, 2012, 12:35 PM EST) -- New Jersey high-frequency trading company Knight Capital Group Inc., which lost $440 million in August because of a software glitch, has agreed to merge with rival Chicago trading house Getco LLC in a cash-and-stock deal valued at $1.4 billion, the companies said Wednesday.

Knight Capital shareholders will have the option to receive $3.75 in cash or one share of the newly merged company for each share of Knight Capital. Getco has set a limit of $720 million for cash awards to Knight stakeholders and will pro-rate...